OREANDA-NEWS. Q2 Group organic service revenue on a management basis1 declined 4.9%; N. & C. Europe down 4.9%; S. Europe down 15.5%; AMAP up 5.7%
H1 EBITDA2 on a management basis1 down 4.1% to Ј6.6 billion, now reported excluding restructuring and significant one-off items of Ј228 million in H1
Adjusted operating profit2 on a management basis1 Ј5.7 billion, free cash flow on a management basis1 Ј2.0 billion
Full year guidance3 confirmed: adjusted operating profit2 around Ј5.0 billion; free cash flow Ј4.5 – Ј5.0 billion
Interim dividend per share of 3.53 pence, up 8.0%; intention to pay full year dividends per share of 11 pence
USD 130 billion sale of US Group announced, USD 84 billion expected return to shareholders
Completion of Kabel Deutschland acquisition in October 2013 advances unified communications strategy
Additional deferred tax assets of Ј17.7 billion recognised in relation to the Group’s historical tax losses; Ј3.0 billion tax charge recognised in relation to the sale of the US Group.
Project Spring

Project Spring organic investment programme to accelerate and extend Vodafone 2015 strategy: continued focus on data, enterprise and emerging markets
Additional investment increased to around Ј7 billion by March 2016, to establish stronger network and service differentiation in major markets
Peak impact on EBITDA from higher operating expenses of up to Ј0.6 billion in the 2015 financial year; neutral to EBITDA by the 2017 financial year
Incremental free cash flow of over Ј1 billion expected in the 2019 financial year
Commitment to annual growth in dividends per share
Vittorio Colao, Group Chief Executive, commented:

“Whilst trading conditions in Europe remain very tough at present, we are encouraged by the forecast return to economic growth over the next two years and the potential for a shift in regulatory focus to support greater industry investment and consolidation.
“We have continued to make good progress in delivering our long-term strategy. Our emerging markets businesses are performing very well, driven by rapidly increasing smartphone penetration and data usage. In mature markets, our performance reflects more challenging conditions, which we continue to mitigate through ongoing actions to improve our operating model and cost efficiency. This rigorous approach, plus our substantial investments in Vodafone Red, 4G and unified communications services – including our recent acquisition of Kabel Deutschland – are laying strong foundations for the future. Our Project Spring organic investment programme – now increased to Ј7 billion – will accelerate further our plans to establish stronger network and service differentiation for our customers.
“The pending USD 130 billion US transaction will reward our shareholders for their long-term support of our strategy and will provide us with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future.”